Christine L. Exley

Christine Exley is an assistant professor of business administration in the Negotiation, Organizations & Markets Unit. She teaches the Negotiation course in the MBA elective curriculum. Prior to joining HBS, Professor Exley earned her PhD in economics at Stanford University and co-founded the dog-matching service Wagaroo, using applied economics to combat the inefficiency in the pet adoption market.

Featured Work

Frank Conway, host of Economic Rockstar, interviews Christine Exley about why she co-founded Wagaroo to help save dogs, how a trip to Honduras changed Christine’s academic path from mathematics to economics, and her work on what factors influence volunteer and charitable giving decisions

Publications

Decisions involving charitable giving often occur under the shadow of risk. A common finding is that potential donors give less when there is greater risk that their donation will have less impact. While this behavior could be fully rationalized by standard economic models, this paper shows that an additional mechanism is relevant: the use of risk as an excuse not to give. In a laboratory study, participants evaluate risky payoffs for themselves and risky payoffs for a charity. When their decisions do not involve tradeoffs between money for themselves and the charity, they respond very similarly to self risk and charity risk. By contrast, when their decisions force tradeoffs between money for themselves and the charity, participants act more averse to charity risk and less averse to self risk. These altered responses to risk bias participants towards choosing payoffs for themselves more often, consistent with excuse-driven responses to risk. Additional results support the existence of excuse-driven types.

Previous research often interprets the choice to restrict one’s future opportunity set as evidence for sophisticated time inconsistency. We propose an additional mechanism that may contribute to the demand for commitment technology: the desire to signal to others. We present a field experiment where participants can choose to give up money if they do not follow through with an action. When commitment choices are made public rather than kept private, we find significantly higher uptake rates.

Individuals frequently exploit "flexibility" built into decision environments to give less. They use uncertainty to justify options benefiting themselves over others, they avoid information that may encourage them to give, and they avoid the ask itself. In this paper, we examine whether a reluctance to give may arise even when such explicit flexibility is absent. We investigate whether merely alerting individuals to an upcoming prosocial ask—that is neither avoided nor occurs in an environment with flexibility—results in reduced prosocial behavior. That is, we investigate whether individuals use time to quickly find ways to decline prosocial asks and thus whether surprising individuals with prosocial asks increases compliance. Results from a field study and complementary online studies provide a clear answer: yes.

Do monetary incentives encourage volunteering? Or, do they introduce concerns about appearing greedy and crowd out the motivation to volunteer? Since the importance of such image concerns is normally unobserved, the answer is theoretically unclear, and corresponding empirical evidence is mixed. To help counter this ambiguity, this paper proposes that the importance of image concerns—such as the desire to appear prosocial and not to appear greedy—relates to individuals' volunteer reputations. Experimental results support this possibility. Individuals with past histories of volunteering are less responsive to image concerns if their histories are public or if their prosocial tendencies are already known. Consistent with a decreased importance of appearing prosocial, they are less likely to volunteer. Consistent with a decreased importance of not appearing greedy, they are less likely to be discouraged by public incentives.

We experimentally test how effort responds to wages—randomly assigned to accrue to individuals or to a charity—in the presence of expectations-based reference points or targets. When individuals earn money for themselves, higher wages lead to higher effort with relatively muted targeting behavior. When individuals earn money for a charity, higher wages instead lead to lower effort with substantial targeting behavior. A reference-dependent theoretical framework suggests an explanation for this differential impact: when individuals place less value on earnings, such as when accruing earnings for a charity instead of themselves, more targeting behavior and a more sluggish response to incentives should result. Results from an additional experiment add support to this explanation. When individuals select into earning money for a charity and thus likely place a higher value on those earnings, targeting behavior is muted and no longer generates a negative effort response to higher wages.

Women's reluctance to negotiate is often used to explain the gender wage gap, popularizing the push for women to “lean-in" and negotiate more. Examining an environment where women achieve positive profits when they choose to negotiate, we find that increased negotiations are not helpful. Women know when to ask: they enter negotiations resulting in positive profits and avoid negotiations resulting in negative profits. While the findings are similar for men, we find no evidence that men are more adept than women at knowing when to ask. Thus, our results do not justify a greater push for women to negotiate.

There is an increasing pressure to give more wisely and effectively. There is, relatedly, an increasing focus on charity performance metrics. Via a series of experiments, this paper provides a caution to such a focus. While information on charity performance metrics may facilitate more effective giving, it may also facilitate the development of excuses not to give. Managers of non-profit organizations should carefully assess this tension when determining if and how to provide information on their performance metrics.

Behavioral biases that cause errors in decision-making are often blamed on cognitive limitations. We show that biases can also arise, or be exacerbated, because agents are motivated to make errors. In three experiments involving nearly 3,200 participants, agents motivated to be selfish make simple computational errors and respond to the salience of information known to them, and agents motivated to believe they are high ability update on entirely uninformative signals. When we remove self-serving motives, agents appear completely (or much more) rational. Biases due to motivated errors survive standard debiasing interventions including providing experience, ensuring attention, and simplifying decisions.

What are individuals' preferences over the payoffs of others? We show that individuals aim to achieve equity but that they narrowly bracket their equity concerns. Rather than equalize overall budgets, individuals equalize the time component or money component of budgets. Individuals believe that achieving equity within these narrow brackets is more socially appropriate than achieving overall equity. Furthermore, individuals care more about achieving equity in time than equity in money. Narrow bracketing of equity concerns and more inequity aversion in time than in money persist when individuals make allocation choices between themselves and others. Our results can help explain a variety of behavioral phenomena including the structure of social insurance programs, patterns of public good provision, and why transactions that turn money into time are often deemed repugnant.

Some theories of conformity hold that social equilibrium either standardizes inferences or promotes a shared understanding of conventions and norms among individuals with fixed heterogeneous preferences (belief mechanisms). Others depict tastes as fluid and hence subject to social influences (preference mechanisms). Belief mechanisms dominate discussions of conformity within economics, but preference mechanisms receive significant attention in other social sciences. This paper seeks to determine whether conformity is attributable to belief mechanisms or preference mechanisms by exploiting their distinctive implications for the process of convergence. Laboratory experiments suggest that economists have focused too narrowly on explanations for conformity involving belief mechanisms.

We use an experiment to show that employers prefer to hire male over female workers for a male-typed task even when they have identical resumes. Using a novel control condition, we document that this discrimination is not specific to gender and is instead driven by beliefs. Employers are simply less willing to hire a worker from a group that performs worse on average, even when this group is instead defined by birth month, a non-stereotypical characteristic. A reluctance to discriminate emerges if workers share the gender or birth month of the worker from the worse-performing group, but even then, a small “excuse" counters this reluctance. Thus, our evidence points to an important role for beliefs in explaining gender discrimination.

Previous research often interprets the choice to restrict one's future opportunity set as evidence for sophisticated time-inconsistency. We propose an additional mechanism that may contribute to the demand for commitment technology: the desire to signal to others. We present a field experiment where participants can choose to give up money if they do not follow through with an action. When commitment choices are made public rather than kept private, we find significantly higher uptake rates.

We experimentally test how effort responds to wages—randomly assigned to accrue to individuals or to a charity—in the presence of expectations-based reference points or targets. When individuals earn money for themselves, higher wages lead to higher effort with relatively muted targeting behavior. When individuals earn money for a charity, higher wages instead lead to lower effort with substantial targeting behavior. A reference-dependent theoretical framework suggests an explanation for this differential impact: when individuals place less value on earnings, such as when accruing earnings for a charity instead of themselves, more targeting behavior and a more sluggish response to incentives should result. Results from an additional experiment add support to this explanation. When individuals select into earning money for a charity and thus likely place a higher value on those earnings, targeting behavior is muted and no longer generates a negative effort response to higher wages.

This case follows the program director of La Ceiba, a Honduras-based microfinance institution, as he navigates four challenging negotiation scenarios involving the organization's loan clients. Students are asked to adopt the perspective of the Program Director and to consider how they would act in these negotiation scenarios that are characterized by unclear objectives and severely asymmetric power dynamics. How should they approach negotiation situations in which the power balance is heavily in their own favor? Should they exert this power and engage in a “hard” negotiation approach? Or, are there circumstances where a “soft” negotiation approach is warranted? In addition to helping students develop a framework about when to use soft versus hard negotiation approaches, two of the notable lessons that arise are (i) the role of apologies after misusing power and (ii) how even “using one’s power for good” can translate into paternalistic outcomes.

Research Summary

Professor Exley’s research focuses on how norms influence individual behavior. Norms are pervasive in our professional careers, our personal life, our social interactions, and civil society more generally. The adherence to some norms, such as norms to be kind to others, is desirable. By contrast, the adherence to other norms, such as those that hinder the advancement of women, is undesirable. In both cases, it is important to understand (i) how norms influence behavior and (ii) how individuals find ways to break norms, for better or for worse.
Professor Exley’s research explores these two channels by employing field, laboratory, and online experiments in order to better understand norms related to prosocial behavior, discrimination, work, gender, and equity.